On Wednesday, April 15, Sprott Asset Management expanded its lineup of exchange-traded funds with the debut of the Sprott Rare Earths Ex-China ETF (REXC). According to Sprott, REXC is the only ETF on the market that is offering a focus on rare earth companies outside China.
Key Takeaways
- Sprott Asset Management has launched REXC, a new fund that provides distinct exposure to rare earth securities outside of China.
- Crucially, REXC is the only fund on the market that offers focused exposure on ex-China rare earth companies.
- There is momentum in the United States to enhance domestic production, supply chains, and reserves for rare earths. Gaining ex-China rare earths exposure could make a great deal of sense for the long term.
“Rare earths sit at the intersection of national security, energy security and technological leadership,” added Steve Schoffstall, Managing Partner and Head of ETFs at Sprott. “As governments in developed countries accelerate efforts to secure non-China supply chains, we believe companies operating outside China across the rare earths value chain are strategically positioned. REXC offers investors a targeted way to access that opportunity through a pure-play ETF.”
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REXC will deliver exposure to companies engaged in the rare earths industry outside of China. Additionally, the fund has a net expense ratio of 65 basis points.
REXC looks to generate similar results to that of the Nasdaq Sprott Rare Earths Ex-China Index. The index looks at companies engaged in producing, refining, mining, and separating rate earth materials across the globe, save for those primarily operating or domiciled in China.
The Advantages of Ex-China Rare Earths Exposure
Rare earths are a critical material utilized in a multitude of different industries. This includes artificial intelligence, energy infrastructure, defense, semiconductors, and many more. Consequently, broad demand for these materials is likely not going to abate any time soon.
See More: How Uranium Could Power the AI Revolution
China holds a dominant position in the rare earths industry. However, gaining exposure to companies outside the country can make a great deal of sense right now. The U.S. is in the midst of strengthening its domestic production and supply chains, along with a $12 billion critical minerals reserve. Therefore, advisors and investors have an opportunity to get in on ex-China rare earths as momentum begins to grow in the space.
“Sprott has established an ETF leadership position for advisors seeking critical materials exposure,” noted Todd Rosenbluth, Head of Research at Vettafi. “It is great to see them expand their lineup and continue to innovate.”
REXC comes online leveraging Sprott’s impressive experience in navigating the field of critical materials and precious metals. For example, one of Sprott’s most popular funds, the Sprott Uranium Miners ETF (URNM), has over $2.2 billion in assets under management.
For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Content Hub.
Disclosures
An investor should consider the investment objectives, risks, charges, and expenses carefully before investing. To obtain a Prospectus, which contains this and other information, contact your financial professional or call 888.622.1813. Read the Prospectus carefully before investing, which can also be found by clicking one of the links below.
Past performance is no guarantee of future results. One cannot invest directly in an index.
Funds that emphasize investments in small/mid-cap companies will generally experience greater price volatility. Diversification does not eliminate the risk of investment losses. ETFs are considered to have continuous liquidity because they allow an individual to trade throughout the day. A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses, affect the Fund’s performance.
Sprott Asset Management USA, Inc. is the Investment Adviser to the ETFs. ALPS Distributors, Inc. is the Distributor for the ETFs and is a registered broker-dealer and FINRA Member. ALPS Distributors, Inc. is not affiliated with Sprott Asset Management USA, Inc. or VettaFi.
Exchange Traded Funds (ETFs): SETM, LITP, URNM, URN, COPP, COPJ, NIKL, SGDM, SGDJ, SLVR, GBUG, METL
Physical Bullion Funds:PHYS, PSLV, CEF, and SPPP.
Originally published on ETF Trends
Gold and precious metals are referred to with terms of art like store of value, safe haven and safe asset. These terms should not be construed to guarantee any form of investment safety. While “safe” assets like gold, Treasuries, money market funds and cash generally do not carry a high risk of loss relative to other asset classes, any asset may lose value, which may involve the complete loss of invested principal.
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